Research on socio-economic indicators starting in 2022 will enable knowledge based decision making to ensure maximum impact on project interventions particularly those projects concerned with needs for STEM and skills transfer. New research undertaken in key project areas and findings can be found here, and this month we are featuring the South African labor market.
South Africa Skilled Labor Markets Dynamics.
Youth empowerment has long been identified as a catalytic tool for tackling youth employment and other youth challenges. The agenda on youth employment had dominated national and international development agenda, with miniscule significant progress recorded. The gap between the number of youths seeking employment and available employment opportunities continue to grow wider. There exists a discrepancy between employers needs and the skillsets of youths entering the labor market. Many graduates are engaged in menial jobs that are not in any form aligned to their degrees due to unavailability of opportunities in their chosen field of studies. The academic curriculums in many of the developing countries are archaic and do not serve the interest rapidly changing local, national and global labor markets These factors combined contribute to the exclusion and marginalization of youths in the national and international development spaces.
African youth are one of the greatest resources that the continent has to its competitive advantage for economic transformation. However, there has been huge challenge in utilizing these resources for personal, communitarian and humanitarian benefits the pressure that has been exerted on the youthful human resources has reached dangerous limits across the continent, calling for urgent measures and strategies for harnessing the demographic dividends for Africa prosperity. By 2030, Africa youth are expected to make up 42% of the world’s youths and account for about 75% of those under the age 35 years. Harnessing the demographic dividend and expanding youth opportunities and productivity, will require a well thought out strategic plan and clear pathways for successfully integration in the 4th Industrial Development Agenda.
The first industrial revolution focused on mechanization, the second revolution perfected the art of mass production using machines & Industrial Processes, the third Industrial revolution embraced digital revolution to scale through globalization, and the fourth Industrial revolution (4IR) . The new world order is driven by breakthrough capabilities in blockchain, IOT, AR/VR, AI, 5 G Web. 3.0 technologies that require advanced computational infrastructure & skillsets to accelerate innovation and developments.
The Corona Virus pandemic will be credited for being catalytic in disrupting the corporate, social, cultural, political and economic systems, and orchestrating a swift migration of global economic systems to the fourth Industrial dimension. The 4IR has changed our working spaces, shopping spaces, social life, cultural practices, corporate work culture have all been disrupted and new practices adopted companies are deploying resources to retool their workers and businesses with new skills and systems upgrades for remote and virtual operations. The scope, scale and complexity of the new world order is unprecedented and game changer.
The South Africa population is estimated at 58 million, made up of 28m males and 30 m female, according to provisional Census for 2019. Stats.SA. The total labor market is about 37.7 m, comprising of a labor force of 22.4 million people. It is estimated that 43% of the labor force is employed while 16% is unemployed. About 41% of the workfare is not economically active. It is estimated that 25% of the labor market falls under skilled workers, 46% semi-skilled and 29% have low skills.
The unemployment rate is South Africa remains high at about 27.6 %, while the youth unemployment rate in South Africa is estimated at about 55.2%.[1] About 10-12 million youths enter the job market every year, where only 3.1 million jobs are created. [2] Africa has one of the fastest, growing youthful population in the world. The youth population is expected to double to about 830 million by 2050. About 70% of Africa youth live on less than US $ 2 a day. South Africa has a low youth employment absorption rate that contributes to high unemployment and under employment rate.
Most of the youth are left vulnerable and are pushed into the informal sector without accompanying safety nets and supporting measures. According to Gini Coefficient Inequality disparity is very high having increased from 0.61 in 1996 to 0,63 in 2015. The inequality is exacerbated by legacy of exclusion which has maintained resources in the hands of the few and continuously marginalized the poor. Equally challenging is the fact that economic growth recorded over time has not materialized in the creation of new job opportunities for the country. According to World Banks Human Capital Index (HCI) which measures Knowledge, skills and health that people gain in their lives to help them become productive and contribute to economic activities of their nations ranks South Africa at 126.
According to South Africa quarterly labor survey of 2019. Estimated 20.4 million youth aged between 15-24 years were in employment while 10.3 million age 14-24 (40%) were unemployed. Employment growth was recorded in the following key sectors community services,56,000 jobs, Agriculture & Mining, 38,000 and private Households 35,000. The following sectors experience job losses Manufacturing, 30,000, construction 24,000, Trade 21,000 and utilities 18,000. The data on migration flows in and out of South Africa, reveal an interesting pattern, of over 636,481 white immigrants moving out of South Africa over the last decade. The migration of whites from South Africa has direct links to contraction of the major productive sectors including manufacturing, construction and agriculture.
The changing global labor markets and working culture presents challenges and well as opportunities. There exist opportunities for reskilling and retooling workforce with new critical skills compatible with 4IR. The skills and competences that are in high demand include, blockchain technologies, Cloud Computing, Web Development, E-Commerce, E- Markets, Online -Shopping & Deliveries, Cybersecurity , Artificial Intelligence, Robotics, Software Programmers & Coders, STEM, Digital Literacy, Mobile Banking, Online Banking, Telecommuting, Virtual Meetings, E-Churches, amongst others. Africa has an opportunity to invest and integrate its youth dividend assets into the global workplace, by way of upskilling, retraining, remote BPO centers, Outsourcing and Entrepreneurship programs
This concept note will explore hanging fruits and quick strategies that South Africa can leverage its youthful human resources for rapid job creation, entrepreneurial scaling and rapid economic growth of new and emerging sectors including, creative industries, health sectors, education, food & beverage, clean energy, fintech sectors, agriculture. Also important is the need to retool large pool of labor force working in elementary jobs, domestic assistants, creative sectors and plant manufacturing operation with new skillsets aligned to the fourth Industrial Revolution emerging economies.
The Circular sector is one of the fastest growing sectors with incredible promise for creation of green jobs that address climate change. The circular economy comprises of material recovery, waste sorting and collection, mining and recycling. The major industries with huge potential for circular economy include water, waste clothing’s & textiles and energy. The circular economy has potential to create new income streams and green jobs for the youth in the informal sectors in South Africa while addressing environmental and sustainable business models.
[1] World Bank report (Oct 2019) “The world bank’s strategy in South Africa reflects to the country’s development priorities and its unique leadership position at sub-regional and continental levels. https://www.worldbank.org/en/country/southafrica/overview”
[2] Stephen. W, African Development Bank Report “Africa’s youth. The African Development Bank and the demographic Dividend.
Great initiative.
I will be more pleased to be help in the Abana International Programmes here in Kenya.